Bears post quick profits in Finisar

Finisar pulled back along with other networking names today, resulting in large gains for downside option positions.

Just Wednesday, Investitute’s market scanners found that 2,400 August $27 puts were purchased for $1.29 to $1.35 with shares at $26.38. Volume was more than double the strike’s open interest of 1,097 contracts, indicating that this was fresh buying.

Today those puts traded up to $3.20, more than doubling in value. The stock fell 9.1 percent at the same time, showing how quickly options can far outpace the move in their underlying shares.

FNSR dropped 7.57 percent today to close at $23.94. The company fell along with other optical-networking equipment makers after rival Applied Optoelectronics plummeted on weak quarterly results.